New homes only represent about 11 percent of all home sales. But, though they’re a small slice of housing market activity, they do play an important role. That’s because, when new homes are selling, builders build more houses. And, since adding new homes to the housing stock can help alleviate upward pressure on home prices, a healthy new home market can make buying conditions better for everyone. These days, though, the market faces some challenges. For example, the increasing cost of land and materials means builders struggle to build new homes in price ranges affordable for first-time and entry level buyers. For example, new numbers from the U.S. Census Bureau and the Department of Housing and Urban Development show that the median sales price of new homes sold in June was $310,400. The average price was $368,600. By comparison, at the end of 2018, the average price of homes purchased by first-time buyers was $219,300. Since a significant share of housing demand these days comes from younger buyers, new home sales are held back by the lack of affordable options for this demographic. More here.
If you’re shopping for a house this summer, you should be prepared to move fast. That’s because, homes are selling quickly so far this season and new numbers from the National Association of Realtors show the trend continuing through June. In fact, 56 percent of the homes sold during the month were on the market for less than a month. The typical property lasted just 27 days, which is up from 26 days the month before. Lawrence Yun, NAR’s chief economist, says the housing market is imbalanced and it’s leading to higher prices and more competition for available homes. “Imbalance persists for mid-to-lower priced homes with solid demand and insufficient supply, which is consequently pushing up home prices,” Yun said. However, like all things real estate, your location will determine the conditions you encounter when shopping for a house. For example, home sales in the Midwest and Northeast – where inventory isn’t quite as tight – increased in June. The South and West, on the other hand, saw declines. More here.
Buying a home involves more than just finding a house you like, making an offer, and moving in. There are many steps along the way and each has an important purpose. Take the inspection, for example. After you’ve had your offer accepted, the home will need to be professionally inspected. This serves a couple of different purposes. First, it provides the home buyer with necessary information about the health of the home and what it’ll take to maintain it. An inspector looks at things like the roof, structural and mechanical issues, plumbing, electrical systems, and the overall condition of the home. Having a professional go through the house can help reveal issues home buyers may have missed when walking through the home. And, if there are serious issues with the home’s mechanical systems or structure, it gives the buyer an opportunity to renegotiate their offer to account for the previously undetected problem. For these reasons, it’s a good idea for the home’s buyer to be present during the home inspection. It’s a good opportunity to get to know the home you’re buying and also a chance to ask questions about proper care and maintenance . More here.
The National Association of Realtors most recent existing-home sales report shows sales were essentially flat in April, falling 0.4 percent from the month before. But though flat sales to begin the spring selling season may seem like trouble, a closer look at the data shows conditions are gradually improving for home buyers and may lead to more activity. Lawrence Yun, NAR’s chief economist, says he believes the improvements will soon help spur more sales. “First, we are seeing historically low mortgage rates combined with a pent-up demand to buy, so buyers will look to take advantage of these conditions,” Yun said. “Also, job creation is improving, causing wage growth to align with home price growth, which helps affordability and will help spur more home sales.” Additionally, inventory continues to improve, with the number of homes available for sale up nearly 2 percent from last year at the same time. However, though the market is becoming more favorable for buyers, it’s still competitive. In fact, 53 percent of homes sold in April were on the market for less than a month. More here
According to the Mortgage Bankers Association’s Weekly Applications Survey, average rates for 30-year fixed-rate mortgages with conforming loan balances fell again last week. Rates for jumbo loans, loans backed by the FHA, and 15-year fixed-rate mortgages remained mostly flat from the week before. Joel Kan, MBA’s associate vice president of economic and industry forecasting, said the average 30-year fixed-rate is now at its lowest point in more than a year. “Mortgage rates fell for the fourth straight week, with the 30-year fixed-rate mortgage hitting its lowest level since January 2018, leading to a rebound in refinances,” Kan said. And while it’s true that there was an 8 percent increase in refinance activity last week due to decreasing rates, purchase activity was actually down from the week before. Kan says home buyers may be delaying their search due to economic uncertainty. But though demand for loans to buy homes was down from the week before, it remains 7 percent higher than at the same time last year. The MBA’s weekly survey has been conducted since 1990 and covers 75 percent of all retail residential mortgage applications. More here.
If you’re a homeowner getting ready to sell, you’re likely thinking about how to get the best price for your house. Naturally, getting a good offer is going to be top priority. The other big issue is timing. Homeowners who are using the sale of their home to fund the down payment on their next place have to time it right. But could the timing of your move affect the price your home gets? Well, according to new research that compared the sale price of occupied versus vacant homes, it might. In fact, the research showed that homes whose owners had already moved out sold for $11,000 less and spent six more days on the market than comparable homes that were still occupied. Why would this be? Well, one reason is that buyers looking at an empty house assume its owners aren’t as eager to sell, since they’ve already moved on. Another reason is furnishings can sometimes help a home show better. However, there are a lot of factors to consider. For example, a home with less attractive décor can sometimes drag its price down just as much as being vacant. More here.
The spring home sales season is underway and there’s no better proof than new numbers from the National Association of Realtors. According to their most recent existing home sales report, 47 percent of homes sold in March were on the market for less than a month. Additionally, the average number of days properties remained on the market was 36 days, down from 44 days the month before. That’s a significant drop and evidence that buyer demand is heating up and homes are selling more quickly. But, despite the fact that homes are selling faster, the overall sales numbers were down from February. Lawrence Yun, NAR’s chief economist, says that’s to be expected after the previous month’s sales surge. “It is not surprising to see a retreat after a powerful sales surge in the prior month,” Yun said. “Still, current sales activity is underperforming in relation to the strength in the job market. The impact of lower mortgage rates has not yet been fully realized.” In other words, though buyer demand may be increasing and homes are selling quickly, the market should be doing even better. One reason it’s not is low inventory. However, that may be changing. In fact, the … Read More
There are many ways to gauge the housing market. You can follow home prices and mortgage rates, buyer traffic and sales, new home construction, or access to credit. But, if you’re a potential home buyer or seller, there may be no better indicator than inventory. That’s because, it’s an easy way to determine whether or not the market favors buyer or sellers. When there are too few homes for sale, buyers have to compete for available homes, which leads to higher home prices. When there are too many homes for sale, the pressure’s on sellers, who have to make sure their home is attractively priced. Typically, inventory is measured by how long it would take to sell the homes currently for sale. A six-month supply is considered a balanced market. Recently, inventory has been low. But new data shows a dramatic improvement. For example, one analysis found that the number of metropolitan areas with less than three months of available inventory has fallen to 3.1 percent from 12.6 percent last year. It also found that two-thirds of metros now have between four and eight months of remaining inventory, which is considered healthy. Overall, the numbers indicate that the housing market … Read More
Slow January Home Sales Only Half The Story New numbers from the National Association of Realtors show sales of previously owned homes fell 1.2 percent in January from the month before. It was the third consecutive monthly decline and, among the country’s four major regions, only the Northeast saw an increase in sales activity. But, though that sounds like the housing market may be headed in the wrong direction, it doesn’t tell the whole story. Why? Well, market fundamentals are actually improving for anyone who may be considering a move this year. In addition to lower mortgage rates and rising inventory, home price increases were the slowest in six years and homes were on the market for an average of 49 days – which is considerably longer than it was last summer, when most listed homes were selling in under a month. In short, spring home buyers may find buying conditions more favorable than expected. “Decelerated sales and increases in inventory will work in favor of potential home buyers, putting them in a better negotiating position heading into the spring months,” NAR president, John Smaby, said. “On top of that, low interest rates will bring an additional $80 per month … Read More
The real estate market tends to slow down in the fall and winter. Spring and summer are far more popular with home shoppers. But last fall, in addition to the normal seasonal slowdown, mortgage rate increases caused many potential home buyers to put a hold on any plans to purchase a house. In short, affordability conditions, the holidays, and harsher weather dampened demand for homes. Since then, however, mortgage rates have decreased and for-sale inventory has shown signs of recovery. This combined with a healthy job market and the approaching spring sales season has spurred renewed optimism among housing professionals. Take the National Association of Home Builders’ Housing Market Index, for example. The index – which measures builder confidence in the market for new homes – saw a four point rebound in February and is now at 62 on a scale where any number above 50 indicates more builders view conditions as good than poor. Randy Noel, NAHB’s chairman, says expectations for the months ahead have turned hopeful. “Ongoing reduction in mortgage rates in recent weeks coupled with continued strength in the job market are helping to fuel builder sentiment,” Noel said. “In the aftermath of the fall slowdown, many … Read More